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    Barayoga Vs Asset

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    Cherlene Tan
    This case involves a labor dispute between former employees of Bicolandia Sugar Development Corp. (BISUDECO) and the Asset Privatization Trust (APT). BISUDECO's assets were foreclosed and sold to APT due to non-payment of loans. APT then sold the assets to Bicol-Agro-Industrial Coop (BAPCI). Former BISUDECO employees filed claims against APT for unpaid wages and benefits. The Supreme Court ruled that APT was not liable for the claims unless it explicitly assumed the liabilities. The Court also held that APT's mortgage lien on the foreclosed assets had preference over the employees' ordinary preferred credit claims

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    Barayoga Vs Asset

    Uploaded by

    Cherlene Tan
    48 views2 pages
    This case involves a labor dispute between former employees of Bicolandia Sugar Development Corp. (BISUDECO) and the Asset Privatization Trust (APT). BISUDECO's assets were foreclosed and sold to APT due to non-payment of loans. APT then sold the assets to Bicol-Agro-Industrial Coop (BAPCI). Former BISUDECO employees filed claims against APT for unpaid wages and benefits. The Supreme Court ruled that APT was not liable for the claims unless it explicitly assumed the liabilities. The Court also held that APT's mortgage lien on the foreclosed assets had preference over the employees' ordinary preferred credit claims

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    This case involves a labor dispute between former employees of Bicolandia Sugar Development Corp. (BISUDECO) and the Asset Privatization Trust (APT). BISUDECO's assets were foreclosed and sold to APT due to non-payment of loans. APT then sold the assets to Bicol-Agro-Industrial Coop (BAPCI). Former BISUDECO employees filed claims against APT for unpaid wages and benefits. The Supreme Court ruled that APT was not liable for the claims unless it explicitly assumed the liabilities. The Court also held that APT's mortgage lien on the foreclosed assets had preference over the employees' ordinary preferred credit claims

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    48 views2 pages

    Barayoga Vs Asset

    Uploaded by

    Cherlene Tan
    This case involves a labor dispute between former employees of Bicolandia Sugar Development Corp. (BISUDECO) and the Asset Privatization Trust (APT). BISUDECO's assets were foreclosed and sold to APT due to non-payment of loans. APT then sold the assets to Bicol-Agro-Industrial Coop (BAPCI). Former BISUDECO employees filed claims against APT for unpaid wages and benefits. The Supreme Court ruled that APT was not liable for the claims unless it explicitly assumed the liabilities. The Court also held that APT's mortgage lien on the foreclosed assets had preference over the employees' ordinary preferred credit claims

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Case Digest # VII-1 |GR No.

    160073 | Barayoga v Asset Privatization Trust | Panganiban – Asymptotes

    2 years ago
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    FACTS:

    Asset Privatization Trust (APT) is a public trust whose mandate is to provisionally manage and dispose of
    non-performing assets of the government. When former President Aquino issued AO No. 14, which
    identified certain assets of government institutions that were to be transferred to the National
    government, among those transferred assets were the financial claim of PNB against Bicolandia Sugar
    Development Corp. (BISUDECO) in a form of a secured loan. BISUDECO is a sugar plantation mill located
    in Camarines Sur. Consequently, APT was constituted as trustee over BISUDECO’s account with PNB by
    virtue of a trust agreement between the government and APT.

    In August 1988, BISUDECO contacted the services of Philippine Sugar Corp (Philsucor) to take over
    management of the sugar plantation and milling operation until August 1992. And because of the
    continued failure of BISUDECO to pay its outstanding loan with PNB, its mortgage properties were
    foreclosed and subsequently sold in a public auction to APT. In July 1992, APT accepted the offer of
    Bicol-Agro-Industrial Coop (BAPCI) to buy the sugar plantation and mill. And in the event of the
    company’s privatization, ATP authorized the payment of separation benefit’s to BISUDECO’s employees.
    Then BAPCI purchased the foreclosed assets of BISUDECO and took over its sugar milling operations
    under the trade name Peñafrancia Sugar Mill (Pensumil).

    The Bisudeco-Philsucor Corfarm Workers Union filed a complaint for unfair labor practice, illegal
    dismissal, illegal deduction and underpayment of wages and other labor standard benefits plus damages
    in 1991. The again they filed a similar complaint in 1992. Then in 1993, they filed an amended complaint
    impleading as additional party respondents APT and Pensumil.

    In 1998 Labor Arbiter ordered APT to pay complainants of the mandatory employment benefits. The
    NLRC affirmed APT’s liability for petitioners’ money claims. Respondent sought relief from the CA and
    they ruled that APT should not be held liable for petitioners’ claim.

    ISSUE:

    Whether or not the liabilities of the previous owners to their employees are enforceable against the
    buyer or transferee who purchased the company’s assets.
    Whether or not ordinary preferred credits is the first choice over special preferred credit.
    HELD:

    Petition is DENIED and the assailed decision is AFFIRMED.

    RULING:

    Any assumption of liability must be specifically and categorically agreed upon. Unless, expressly
    assumed, labor contracts like collective bargaining agreements are not enforceable against the
    transferee of an enterprise. Labor contracts are in personam and thus binding only between the parties.
    The liabilities of the previous owner to its employees are not enforceable against the buyer or
    transferee, unless (1) the latter unequivocally assumes them; or (2) the sale or transfer was made in bad
    faith.
    Under Art 2241 and 2242 of the Civil Code, a mortgage credit is a special preferred credit that enjoys
    preference with respect to a specific/determinate property of a debtor. On the other hand, the workers
    preference under Art 110 of the Labor code is an ordinary preferred credit. While this provision raises
    the worker’s money claim to first priority in the order of preference established in Art 2244 of the Civil
    Code, the claim has no preference over special preferred credits. Being a mortgage credit APT’s lien on
    BISUDECO’s mortgaged assets is a special preferred lien that must be satisfied first before the claims of
    the workers

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